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About 4 million homeowners who may have been improperly foreclosed upon in 2009 and 2010 are getting an opportunity to have their cases reviewed. Whether they will be reimbursed is up to the same lenders who are accused of moving too swiftly to seize their homes.

The Office of the Comptroller of the Currency said Monday that mortgage services will begin sending out letters this month that ask borrowers if they want their case reviewed.

The nation’s 14 largest mortgage servicers — including Citibank, Bank of America, JPMorgan Chase and Wells Fargo — were ordered to offer to review cases after the government found that some rushed the foreclosure process without carefully reviewing documents. Source: 4 million foreclosures subject to review

FOUR MILLION! That’s a large number. Piecing together stats for 2008 – 2010 via Google search, I was able to come up with roughly 10,000,000 foreclosure filings over those three years (Sources: 2008, 2009, and 2010). So, 4,000,000 reviews implies roughly 40% of all foreclosure filings. That’s a lot! How much is this going to cost? Who’s going to pay?

Since each borrower will get a chance to request their foreclosures be reviewed, I’d propose that the borrower pay the cost of the investigation. If it is found a borrower’s home was wrongfully/incorrectly foreclosed, then they’d be entitled to a reimbursement of the cost of investigation.

If someone was foreclosed upon legitimately, have him eat the cost! I can imagine thousands wanting to have their foreclosure reviewed even if they know it was for legitimate reasons.

Perhaps plan like this will dissuade many false “wrongful foreclosures” cases from being investigated, saving everyone time and money.

This is a situation where the law and common sense are not meeting in the middle. There are really two issues with the foreclosure mess.

The first is that banks improperly foreclosed on technicalities (and in some cases fraudulently made up documents). Essentially all that is going on is that something wasn’t filed properly thus the argument that the foreclosure isn’t legitimate.

There is no debate whether these homeowners paid their mortgages on time or not. They didn’t.

The issue is that the banks didn’t go through proper procedures to foreclose or file proper documents to show they had legal interest in the properties to do so.

Common folks say screw the homeowner. This is real simple, you pay you stay. You don’t? GTFO. You pay BofA every month and didn’t. Case closed.

However, lawyers have figured out they can slow down or stop the foreclosure process by finding technicalities. They want BofA to prove they still are the servicer owner of the note even though BofA’s name is on the mortgage statement. See BofA sold interest in the loans to other investors.

This is like letting off a murderer caught on video tape in front 20 witnesses in broad day light and then admitting guilt because some officer forgot to read Miranda rights.

All these homeowners will be foreclosed on, however, the system is going to be shut down and will continue to be inefficient. All future home buyers are going to be signing even more documents you don’t read at RE closings and it is going to cost more to finance homes in the future.

JLP, you see John’s point. Well, I see your point too. The banks have a right to sue the borrower just the same. The opportunity goes both ways or do you take a stand with that? Since you take John’s point, would you say you stand with the people on this issue?

What irks me the most is that when I refinanced in 2007 the appraisal came out that my home was worth $325,000. So I thought I was safe in redoing my mortgage to $225,000. That left a $100k safety net. Then the RE bubble burst and now I am stuck with a home that is worth less than $100K. Now the owner of the loan, a federal biz called Freddie Mac is evicting me as if I had never paid a dime in 16 years at my home. I also have children and a disabled spouse. The bank lied to me and they got bailed out. No one thought to bail out the homeowner who was told their home was worth much more than it was actually worth. They just wanted to refinance and get their $10K closing costs.